The main difference is the TLT is only invested in U.S. Treasury Bonds (the US Dept of Treasury), while the AGG is invested in many, many different bonds (some of which include Treasury Bonds).

Intution would tell me that because the AGG is more diversified, it would be better, but looking at past performance the TLT seems to have a little bit better of a yield.

I'm pretty young, so bonds aren't really a big part of my portfolio yet. For long term investing (10 years or more) you can't go wrong with a Stock Market Index Fund. Maybe check that out for the long term?